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Portfolio Allocation – More Moves February 29, 2008

Posted by pf in Expenses and Savings, Portfolio Allocation.
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Earlier this week, I made some change to my Portfolio Allocation. I’m starting to get this strange feeling of being a bit out of control. I have been considering a fund for some months now and after having decided to hold off, I changed my mind and made the plunge. I plugged $5K into an Africa / Middle-East fund (TRAMX) as part of my Roth IRA contributions for 2008. As far as my international holdings go, this felt like an area where I didn’t really have any exposure, so this was my solution to put me on the map, so to speak.

Over time, I could envision this taking up 5% of my portfolio. As I stand back a bit, I have a few lingering concerns:

  • Is my International exposure too much (40% now)
  • Am I chasing performance? (foreign markets have been outperforming for awhile now)
  • Being a bit too aggressive in my investing approach (usually have a significant stake in PRWCX which is no “hot rod” as far as investments go”.

These are just lingering thoughts. For now, I think I’m comfortable with them, but will be seeking the counsel of others on this topic (including any comments from readers). As most of you know, I’m a firm believer in being invested globally…so does not feel completely foreign (pun intended) to have such a large stake there. However, I don’t want to be foolish either (they have had a very nice run these last years).

Ideally, I’d like to set my allocations and then just let it run for awhile…I think I’m getting closer…just trying to get comfortable I guess.

Comments»

1. joetaxpayerblog - February 29, 2008

What was your original Foreign allocation? If it was 20% or so, then this is the time to reallocate. You should decide what your plan is up front; you can reallocate once per year (this can help with tax planning), or when your target percent is exceeeded by a certain percent, say, 5%, or 10%. When one sector rises too quickly, the reallocation helps take some gains so you protect yourself a bit from that sector making a large correction.
JOE

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